Market Report

Philippines – Age of disruption!

by Marc Espino / Jul 10, 2019


Major digital adoption
Following breakthroughs in smartphone and data penetration, the Philippines is on the verge of major digital adoption. Key building blocks in this process are its large population, youthful demographic and government-led improvement of essential infrastructure. We expect the digital environment to gain traction over the next five years, with data users breaching 94% penetration. Organisations that are able to adapt and execute will survive over the long run.

Government intervention
In a country of 105 million people, Filipinos are some of the biggest users of social media and video-on-demand services – core drivers of digital maturity. Government intervention through the entrance of a third telco has kept data affordable, despite the improvements in 4G/LTE speed and coverage.

Internet players gearing up
A narrow range of offerings saw online retail (food and non-food), fintech and ride-hailing apps lead the Philippines’ first digital wave in 2012-14. More recently, logistics, media and entertainment have caught up. Increased investment flow and the central bank’s initiative to drive financial inclusion are key developments. We expect major platform enhancements in the next five years as players gear up for the country’s imminent digital maturity.

Looking at who can adapt
Digitisation is modifying the business landscape, and incumbent players across multiple sectors are fighting to ensure they are not left behind. Online platforms have lowered entry barriers, causing long-established boundaries to tumble. We asked our respective analysts to score each company they cover to capture the awareness of digital, level of understanding and any shift in mindset towards digital. The average scores per sector reflect the depth and current impact on each industry.

Opportunities will widen
A number of drivers – improved telecom systems and facilities, upgrades to internet infra platforms and increasing digital adoption – are set to unfold, leading to better telecom infrastructure, advancement of internet. When this happens, digital opportunities will widen across multiple sectors. The long-term winners will be those organisations that can capitalise on the new era’s opportunities by adapting and realising their digital capabilities.